I have a deal going on that I am unsure what the best way to close it is. It’s my first deal of this type so I am basically wondering what is the best way to close.
I have an option from the seller for $8000. I am gonna flip it to a buyer for 12-13k. I am showing the house over the weekend to a few people so hopefully I can make the sale. I plan to sign a purchase agreement with the buyer when they accept my offer and collect a deposit.
That all makes sense.
I am curious what is the smartest way to close once this happens. Could someone explain what would be the norm with an option deal?
Thanks in advance,
Jordan
this is a pretty simple deal… I have done a bunch (50-60 or so).
i have a few questions first:
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is your buyer purchasing the property out right or are they just buying the right to purchase the prorpety(AKA, {Purchasing the option)?
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is your option purchase price $8000 or is that the option fee you payed
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is there option Purchase price $12-13k or is that the option fee they are paying you?
All so I post my direct contact information here for a reason if anyone feels the need to us it.
Hey Matt,
In response to your questions.
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Buyer is purchasing the property out right.
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Option Purchase Price is $8000
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Their purchase price will be the $12-13k.
I’d just as soon prefer on this deal to not have the buyer knowing what I paid.
They will know what you paid after closing… :deal
But if you want to hide it from them until closing you have to do a double close… :banghead
Find a title company that has done them before, and be upfront with them… :bobble
This is a cool little wholesale deal…
OK this is what I would do if I HAD to double close:
- find your buyer for the property.
- take there Non- refundable deposit on signing purchase and sale agreement
i) make sure in your P&S contact it states you are to be held blameless if the transaction can not be completed.
- Contact all parties and orchestrate with title company
4 you pay off your seller at the same time he buys off of you
- the title company credits deposit and you get the balance. (Yes Cash!!!)
Note: you shouldn’t use any of your own cash for this deal, because the funds come from your buyer. You can not simply assign this contract because if you did the end buyer would know what you are paying…. It can be cleaner if you wanted to tell them what you bought it for. But if you want to hide it, it will be more expensive the double close way.
When I do small whole sale deal I just tell them what I paid for it and assign the contract. Its simple clean…. And I am guaranteed my money. The double close does have a risk it might blow up… but that’s your call.
Personally this is not enough cash for me to go through all this trouble. I tell the buyers, “I have ten other buyers willing to pay $XXX.xx for the contract what do you think.”
Small option assignment fee $2-3k and I move on to the next deal the same hour.
Good luck and keep me posted on the out come!!!